Agilent Technologies Ends IPO Quiet Period and Provides Additional Information On Fourth-quarter, Full-Year Results.PALO ALTO Palo Alto, city, California Palo Alto (păl`ō ăl`tō), city (1990 pop. 55,900), Santa Clara co., W Calif.; inc. 1894. Although primarily residential, Palo Alto has aerospace, electronics, and advanced research industries. , Calif.--(BUSINESS WIRE)--Dec. 16, 1999-- Agilent Technologies This article needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. , Inc. (NYSE NYSE See: New York Stock Exchange : A) today provided further information on its results for the 1999 fiscal year's fourth quarter, which ended Oct. 31, 1999, as well as for the full fiscal year. The company, a subsidiary of Hewlett-Packard See HP. Hewlett-Packard - (HP) Hewlett-Packard designs, manufactures and services electronic products and systems for measurement, computation and communications. The company's products and services are used in industry, business, engineering, science, medicine and Company (NYSE: HWP HWP Height (and) Weight Proportionate HWP Half-Wave Plate HWP Highway Patrol HWP Height Weight Proportional HWP Hewlett-Packard Corporation (stock symbol) HWP Hydrolyzed Whey Peptides ), completed a $2.2 billion initial public offering (IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. ) of stock -- the largest in Silicon Valley history -- on Nov. 18, 1999. The legally mandated "quiet period" for Agilent (Agilent Technologies, Santa Clara, CA, www.agilent.com) The test and measurement subsidiary of HP. In 1999, HP split off the division that started the company into an independent subsidiary named Agilent Technologies. At the time, the $2. ended on Dec. 13, 1999. As the company reported in its Form S-1 filing on Nov. 15, 1999, net revenue for the fourth quarter was $2.4 billion, an increase of 23 percent over the same period last year. For the full year, Agilent's net revenue totaled $8.3 billion, up 5 percent over fiscal year 1998. "Our revenue goal for fiscal 2000 is about $9.4 billion, which is consistent with the plan we've we've Contraction of we have. we've have had in place for some time," said Bob Walker, chief financial officer of Agilent. For the fourth quarter, Agilent's earnings from operations were $205 million, or 8.4 percent of the quarter's net revenue. For the full year, earnings from operations were $741 million, or 8.9 percent of revenue. Net earnings for the fourth quarter were $146 million, compared with a net loss of $51 million in the same period last year. (The net loss for the fourth quarter of last year included pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $145 million.) This quarter's net earnings were 6 percent of revenue. Net earnings for fiscal 1999 were $512 million, an increase of 99 percent over the $257 million reported in fiscal 1998. (Net earnings for the full-year 1998 included pre-tax restructuring charges of $163 million.) Agilent's fiscal 1999 net earnings were 6.1 percent of net revenue, and fiscal 1998 net earnings were 3.2 percent of net revenue. Earnings per share for the fourth quarter were 32 cents, and for fiscal 1999 were $1.11, based on approximately 460 million shares outstanding. The share total includes shares held by Hewlett-Packard Company, shares issued in Agilent's IPO and the estimated dilutive impact of options converted from HP. "This quarter's growth in earnings and revenue gives Agilent a great start as we begin life as a separate company and work to build shareholder value," said Edward Edward killed his father at his mother’s instigation. [Br. Balladry: Edward in Benét, 302] See : Patricide W. (Ned) Barnholt, president and chief executive officer of Agilent. "We achieved these results while separating from HP and preparing for our very successful IPO. Our 42,000 employees around the world and our HP colleagues deserve the credit for the resounding re·sound v. re·sound·ed, re·sound·ing, re·sounds v.intr. 1. To be filled with sound; reverberate: The schoolyard resounded with the laughter of children. 2. success of Agilent's launch, which has energized our entire company." In the fourth quarter, total orders were $2.5 billion, an increase of 31 percent compared with the same period last year. Orders from the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. totaled $1.1 billion, an increase of 13 percent over last year's fourth quarter, while orders from outside the United States were $1.4 billion, up 49 percent over the same period a year ago. When compared with the fourth quarter of fiscal 1998, orders from Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). increased 16 percent to $490 million in 1999, while fourth quarter
orders from Asia Pacific jumped 82 percent to $736 million. Orders from
Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. in the fourth quarter totaled $71 million, a 37 percent
increase over the comparable quarter last year.
For the full year, Agilent's orders increased 12 percent and were $8.9 billion. In the United States, orders increased 10 percent to $4 billion, while orders from outside the United States rose 14 percent and totaled $4.9 billion. When compared with fiscal 1998, orders from Europe increased 7 percent to $2 billion in 1999, while fiscal 1999 orders from Asia Pacific rose 22 percent to $2.4 billion. Orders from Latin America in fiscal 1999 totaled $213 million, a 5 percent increase over last year. Business Summary Test and measurement Net revenue in test and measurement rose 22 percent in the fourth quarter of 1999 over the comparable period in 1998, while orders increased 57 percent. Earnings from operations in test and measurement were $100 million, compared with earnings from operations of $16 million in the same period a year ago. Demand was excellent for products and systems for the wireless-communications market as well as for testing the high-bandwidth optical network infrastructure and network-access technologies such as Digital Subscriber Line See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and (DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary ). The automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. test segment, which serves the semiconductor and electronics markets, achieved strong revenue and order growth, but revenue from the systems portion of the communications solutions segment fell short of Agilent's goals. There was particularly strong demand for systems used to test flash memory, radio frequency/integrated circuits and system-on-a-chip System-on-a-chip or system on chip (SoC or SOC) refers to integrating all components of a computer or other electronic system into a single integrated circuit (chip). products. Semiconductor products Net revenue for semiconductor products increased 30 percent over the same period a year ago and totaled $492 million, the highest quarterly revenue total ever achieved by this segment. Orders for the quarter rose 21 percent and were $442 million. Earnings from operations in semiconductor products was $52 million for the quarter compared with a loss from operations of $122 million in the same period last year. There was excellent growth across the segment's product lines, driven by robust demand in the networking and mobile-communications markets. Semiconductor products for wireless and fiber-optic See fiber optics. communications, as well as high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. networking, achieved outstanding revenue and order increases this quarter. Healthcare Solutions The healthcare solutions segment posted a 30 percent increase in net revenue over the comparable period a year ago, resulting in net revenue of $458 million, the highest-ever quarterly revenue for this segment. The patient-monitoring and cardiology cardiology Medical specialty dealing with heart diseases and disorders. It began with the 1749 publication by Jean Baptiste de Sénac of contemporary knowledge of the heart. Diagnostic methods improved in the 19th century, and in 1905 the electrocardiograph was invented. product lines posted outstanding revenue increases compared with the same quarter a year ago. Orders during the quarter were $391 million, down 3 percent compared with a very strong year-ago quarter. Earnings from operations totaled $39 million for the quarter, compared with $8 million in the fourth quarter of fiscal 1998. Chemical Analysis Net revenue in the chemical analysis segment rose 7 percent over the year-ago period and totaled $272 million. For the year, net revenue in the chemical analysis segment exceeded $1 billion for the first time ever. Orders in the fourth quarter increased 4 percent to $286 million over the same period a year ago. This quarter's revenue increase was driven by solid growth in the liquid chromatography chromatography (krō'mətŏg`rəfē), resolution of a chemical mixture into its component compounds by passing it through a system that retards each compound to a varying degree; a system capable of accomplishing this is called a line, which sells heavily into the pharmaceutical market. There was also a healthy increase in the support and consumables lines. Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before were $13 million for the quarter, compared with $18 million in the year-ago quarter. The chemical analysis segment recently introduced the Bioanalyzer 2100 system, which incorporates "lab-on-a-chip This article is about the technology. For the journal, see Lab on a Chip (journal). Lab-on-a-chip (LOC) is a term for devices that integrate (multiple) laboratory functions on a single chip of only millimeters to a few square centimeters in size and that are " technology developed in collaboration Working together on a project. See collaborative software. with Caliper caliper Instrument that consists of two adjustable legs or jaws for measuring the dimensions of material parts. Spring calipers have an adjusting screw and nut; firm-joint calipers use friction at the joint to hold the legs unmoving. Technologies. Costs and Expenses The company's gross margin for the quarter was 47.2 percent of net revenue, while gross margin for the fiscal year was 47.3 percent of revenue. The full-year figure compares with a gross margin of 43.3 percent in the prior year. Excluding the effect of restructuring charges taken in fiscal 1998, gross margin for that year would have been 45 percent of revenue. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were 38.8 percent of net revenue for the quarter, with selling, general and administrative expenses at 26.9 percent of revenue and research and development at 11.9 percent. For the full year, operating expenses were 38.4 percent of net revenue. Selling, general and administrative expenses in fiscal 1999 were 26.4 percent of revenue, while research and development was 12 percent of revenue. Expenses associated with launching Agilent contributed to the fourth quarter increase in the company's operating-expense as a percent of net revenue. These expenses rose in the fourth quarter compared with the third quarter, due primarily to planned branding-related costs and the initial costs of operating as a stand-alone company stand-alone company An independent operating firm. For example, a large diversified firm may consider spinning off a subsidiary because, as a stand-alone company, the subsidiary would command a higher price-earnings ratio than the parent. . "We're we're Contraction of we are. we're we are planning to spend about $140 million on branding in fiscal 2000," said Walker. "In addition, we will have significant ongoing costs associated with setting up systems, processes and programs on our own that we previously shared with HP. We began experiencing the impact of these costs in the fourth quarter, and we expect them to total between $250 and $300 million next year. "Shortly after the realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of HP was announced in March, we decided that our primary goal was to accomplish the separation on a very aggressive schedule. Now that we're operating independently, we're going to pursue opportunities to tailor A tailor is a person whose occupation is to sew menswear style jackets and the skirts or trousers that go with them. Although the term dates to the thirteenth century, tailor our systems and processes to Agilent's needs. We expect to achieve improvements in our cost and expense structures as a result of this work, with these improvements having greater impact beginning in fiscal 2001." Asset Management Return on assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). for Agilent was 9.4 percent for the quarter. As a percent of revenue, accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying was 19.6 percent of revenue; inventory was 18 percent; and net property, plant and equipment was 16.7 percent. Strong revenue growth during the quarter, especially in October October: see month. , drove the increase in the accounts receivable ratio. The company is also implementing a number of programs to improve inventory ratios in its businesses. Business Outlook "We're encouraged by the improvement in our results in the fourth quarter and the second half of the year," said Barnholt. "It's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have clear that the macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. environment in Asia is much better than it was earlier this year. In addition, demand in the semiconductor business has clearly improved. "Our major businesses are entering the first quarter of the new fiscal year with good order momentum and strong new products," said Barnholt. "In addition, we are continuing to identify and implement ways to improve our cost structures. However, as we've said, we will have additional costs related to our operating as a separate company. "I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in very pleased with the progress we've made in the eight months since we began the creation of Agilent. We're starting our first full year as an independent company with many strengths -- our technology capability, our customer and partner relationships, and 42,000 talented and committed people around the world. We're going to emphasize speed, focus and accountability The traceability of actions performed on a system to a specific system entity (user, process, device). For example, the use of unique user identification and authentication supports accountability; the use of shared user IDs and passwords destroys accountability. in everything we do, and we're going to pursue many exciting opportunities primarily in communications and life sciences." About Agilent Technologies Agilent Technologies, Inc. is a diversified diversified (di·verˑ·s technology company, resulting from Hewlett-Packard Company's plan to strategically realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. itself into two fully independent companies. With 42,000 employees serving customers in more than 120 countries, Agilent Technologies is a global leader in designing and manufacturing test, measurement and monitoring instruments, systems and solutions, and semiconductor and optical components. The company serves markets that include communications, electronics, life sciences and healthcare. The businesses comprising Agilent, a subsidiary of HP, had net revenues of more than $8.3 billion in fiscal year 1999. Information about Agilent Technologies can be found on the Web at www.agilent.com. More information this quarter's earnings is available at http://investor.agilent.com. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. (including, without limitation, information regarding projected revenue, anticipated expenses and the information in the section captioned "Business Outlook") that involve risks and uncertainties that could cause the results of Agilent Technologies to differ materially from management's current expectations. These risks include the ability of Agilent to successfully manage its transition into an independent company, including the ability to retain and motivate key employees in a very competitive technology labor market labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience ; the potential for business disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. ; risks relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the worldwide allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of assets and people between Hewlett-Packard Company and Agilent during the separation process; and risks that the proposed distribution of Agilent shares to HP shareholders may not be completed in a timely manner or at all. In addition, other risks that Agilent faces in running its operations include: the timely innovation, production, commercialization and acceptance of new products and services; the economic, political and other risks associated with international sales and operations; the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of many of the industries and markets into which Agilent sells its products; the potential for experiencing increased costs resulting from decreased purchasing power Purchasing Power 1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase. 2. as a separate company from Hewlett-Packard; the current use of information systems and transitional services provided to Agilent by HP, which Agilent must develop and procure To cause something to happen; to find and obtain something or someone. Procure refers to commencing a proceeding; bringing about a result; persuading, inducing, or causing a person to do a particular act; obtaining possession or control over an item; or making a person on its own in the near term, potentially at increased costs; the impact on customers and suppliers as they prepare for the Year 2000; and other risks detailed in Agilent's Registration Statement on Form S-1 as filed with the Securities and Exchange Commission on November November: see month. 17, 1999. -0-
AGILENT TECHNOLOGIES,INC.
CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
(Unaudited)
Three months ended Percent
(In millions, except Oct 31 increase/
per share amounts) 1999 1998 (decrease)
------ ------ ----------
Net revenue:
Products $ 1,839 $ 1,515
Products to Hewlett-Packard 242 164
Services 367 308
------- -------
Total net revenue 2,448 1,987 23
Costs and expenses:
Cost of products
and services 1,292 1,267
Research and development 292 249
Selling, general and
administrative 659 518
------- -------
Total costs & expenses 2,243 2,034 10
Earnings from operations 205 (47)
Other income (expense), net 19 (32)
Earnings (loss) before taxes 224 (79)
Provision (benefit) for taxes 78 (28)
------- -------
Net earnings (loss) $ 146 $ (51)
======= =======
Basic and diluted net
earnings (loss) per share
$ .39 $ (.13)
======= =======
Average shares used in
computing basic
and diluted net 380 380
earnings per share ======= =======
Unaudited pro forma net
earnings per share
Basic $ 0.32
Diluted $ 0.32
Average shares used
in computing unaudited
pro forma net earnings
per share:
Basic(1) 452
Diluted(2) 460
(1) Average shares used in computing unaudited pro forma net earnings
per share includes the 380,000,000 common shares outstanding plus
the 72,000,000 shares issued in Agilent Technologies' initial
public offering, as proceeds of the offering were distributed to
Hewlett-Packard.
(2) Average shares used in computing unaudited pro forma diluted net
earnings per share includes the 380,000,000 common shares
outstanding plus 72,000,000 shares issued in the initial public
offering plus 7,851,000 shares related to the estimated effect of
dilutive stock options and other employee stock plans. The number
of dilutive stock options was computed using the treasury stock
method and the initial public offering price of $30.00 per share.
AGILENT TECHNOLOGIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
Twelve months ended Percent
(In millions, except Oct 31 increase/
per share amounts) 1999 1998 (decrease)
------ ------ -----------
Net revenue:
Products $ 6,193 $ 6,098
Products to Hewlett-Packard 832 696
Services 1,306 1,158
------- -------
Total net revenue 8,331 7,952 5
Costs and expenses:
Costs of products
and services 4,388 4,512
Research and development 997 948
Selling, general and
administrative 2,205 2,050
------- -------
Total costs & expenses 7,590 7,510 1
Earnings from operations 741 442 68
Other income (expense), net 46 (46)
Earnings before taxes 787 396 99
Provision for taxes 275 139
------- -------
Net earnings $ 512 $ 257 99
======= =======
Basic net and diluted earnings
per share: $ 1.35 $ .68 99
======= =======
Average shares used in
computing basic and diluted
net earnings per share: 380 380
======= =======
Unaudited pro forma net
earnings per share:
Basic $1.13
Diluted $1.11
Average shares used
in computing unaudited
pro forma net earnings
per share:
Basic(1) 452
Diluted(2) 460
(1) Average shares used in computing unaudited pro forma net earnings
per share includes the 380,000,000 common shares outstanding plus
the 72,000,000 shares issued in Agilent Technologies' initial
public offering, as proceeds of the offering were distributed to
Hewlett-Packard.
(2) Average shares used in computing unaudited pro forma diluted net
earnings per share includes the 380,000,000 common shares
outstanding plus 72,000,000 shares issued in the initial public
offering plus 7,851,000 shares related to the estimated effect of
dilutive stock options and other employee stock plans. The number
of dilutive stock options was computed using the treasury stock
method and the initial public offering price of $30.00 per share.
AGILENT TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEET
(In millions, except par value and share amounts)
ASSETS October 31
1999 1998
------- ------
Current assets:
Cash and cash equivalents $ -- $ --
Accounts receivable 1,635 1,215
Inventory 1,499 1,485
Other current assets 404 375
------- -------
Total current assets 3,538 3,075
------- -------
Property, plant and equipment, net 1,387 1,481
Other assets 519 431
------- -------
Total Assets $5,444 $4,987
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable 510 435
Employee compensation and benefits 550 574
Deferred revenue 241 205
Other accrued liabilities 380 385
------- -------
Total current liabilities 1,681 1,599
------- -------
Other liabilities 381 366
Commitments and contingencies
Stockholder's equity:
Preferred stock; $.01 par
value; 125,000,000
shares authorized; none issued
and outstanding -- --
Common stock; $.01 par value;
2,000,000,000 shares
authorized; 380,000,000 shares
issued and outstanding in 1999 4 --
Additional paid-in capital 3,378 --
Stockholder's net investment -- 3,022
------ ------
Total stockholder's equity 3,382 3,022
------ ------
Total liabilities and stockholder's equity $5,444 $4,987
====== ======
AGILENT TECHNOLOGIES, INC.
Orders and Net Revenue by Business Segment
(Unaudited)
(In millions)
For the periods Three months Twelve months
ended October 31 1999 1998 1999 1998
------- ------- ------- -------
ORDERS
Test and measurement $1,422 $ 904 4,580 3,967
Semiconductor products 442 365 1,795 1,608
Healthcare solutions 391 404 1,493 1,379
Chemical analysis 286 273 1,010 963
------ ------ ------ ------
Total $2,541 $1,946 $8,878 $7,917
====== ====== ====== ======
NET REVENUE
Test and measurement $1,226 $1,002 $4,082 $4,100
Semiconductor products 492 379 1,722 1,574
Healthcare solutions 458 352 1,501 1,340
Chemical analysis 272 254 1,026 938
------ ------ ------ ------
Total $2,448 $ 1,987 $ 8,331 $7,952
====== ====== ====== ======
In general, recorded orders represent firm purchase commitments from our customers with established terms and conditions for products and services that will be delivered within six months. |
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